Sunday, October 15, 2017

Look First to Existing Customers When Selecting ABM Accounts


Account-based marketing is often described as an effective way to acquire new customers. And that description is accurate. But ABM is also a powerful tool for growing relationships with existing customers you can't afford to lose.

One reason for the growing popularity of account-based marketing is the widely-held belief that it can dramatically improve the productivity of customer acquisition activities and programs. Most of the content that's currently being produced about ABM emphasizes its use for winning new customers. What often gets lost in this hype is that many companies can realize big benefits by using ABM with (some of) their existing customers.

The importance of existing customers hasn't been lost on many seasoned ABM practitioners.

Why Use ABM With Existing Customers
There's a very practical reason for focusing ABM efforts on existing customers. Most B2B companies have a core group of customers that are critical to the company's well-being. In many companies, 5% of the customers produce 50% or more of the total revenue. In my work with dozens of B2B companies over the past 30 years, I've frequently seen revenue distributions that were even more skewed toward large customers, where 4 or 5 customers accounted for more than 40% of the total revenue.
Account-based marketing is also particularly appropriate for your high-value existing customers because you potentially have several advantages with existing customers that ABM can leverage. Many of these advantages relate to the quality of the "intelligence" that you have regarding existing customers. When you have been working with a customer for a reasonable amount of time, you will have (or should have) rich and detailed information regarding:
  • The specific business needs and challenges the customer is facing
  • The identities, preferences, interests, and concerns of the key stakeholders who influence the relationship between the customer and your company
  • How the key stakeholders currently view their relationship with your company
  • The customer's organizational structure and culture
When used properly, these insights provide the foundation for valuable, relevant, and compelling customer engagement programs. And because most of these insights develop over time as a result of multiple interactions, they effectively constitute "inside" information that "outside" competitors can't easily duplicate.
At a high level, ABM for existing customers and ABM for new customer acquisition are based on the same fundamental principles. But when ABM is used with existing high-value customers, it becomes an integral component of your company's strategic account management program. In a future post, I'll discuss the critical relationship between account-based marketing and strategic account management.

Image courtesy of Kate Ter Haar via Flickr CC.

Sunday, October 8, 2017

How Will You Grow in 2018?


With the fourth quarter of 2017 now underway, many B2B companies have already started their planning for 2018. Over the next several weeks, senior company leaders will be evaluating how their business is currently performing and setting goals for the coming year. Some of those goals will inevitably relate to revenue growth, and one thing is clear:  Marketing leaders are squarely on the growth hotseat.

In a 2016 global survey of CEO's and CMO's by Accenture Strategy, 50% of the CEO's said their CMO is primarily responsible for driving disruptive growth in their organization. About a third of the CEO's also said that the CMO is the first to go when growth targets aren't met.

To set realistic growth objectives for 2018, and to implement marketing programs that will effectively support those objectives, marketing leaders must have a clearly-defined revenue growth strategy. One critical - but often overlooked - step in developing a sound revenue growth strategy is identifying where growth will come from. Specifically, marketing leaders need to answer three basic questions during their planning process:

  1. What are the structural sources of revenue growth in our business?
  2. How much growth is each source currently producing?
  3. How much growth can we realistically expect to generate from each source next year?
I described the most common structural sources of revenue growth in an earlier post, so I won't repeat that discussion here. The following diagram depicts the sources of growth that exist in most companies:


How Much Growth is Each Source Currently Producing?
In this post, I'll discuss how to answer Questions 2 and 3. When I work with clients on business or marketing strategy projects, I use sales data from the client's ERP/accounting system to answer the second question. Here's a simplified example of how the analysis works.
Suppose that your company had total sales of $110 million for the 12 months ending on September 30, 2017. In this example, I'll call this 12-month period "2017." You had total sales of $100 million for the 12 months that ended on September 30, 2016. We'll call this 12-month period "2016." So, your company grew sales by $10 million during 2017.
For this example, let's suppose that your company did not acquire another business or introduce any new types of products in 2017. During 2017, your company did begin selling in a new geographic market. Under these circumstances, your primary sources of revenue growth in 2017 were base retention, increased sales to existing customers, sales to new customers in existing markets, and sales to new customers in new markets.
To quantify how much revenue growth each of these sources produced, you would use "sales by customer" data from your ERP/accounting system.
Base retention (revenue churn) - To measure the impact of revenue churn, identify the customers who bought from you in 2016, but did not buy from you in 2017. The total sales made to these customers in 2016 is the amount of revenue that was "lost" in 2017 due to revenue churn. For this example, let's say the amount of lost revenue was $1 million.
Increased sales to existing customers - Identify the customers who bought from you in both 2017 and 2016, and compare the 2017 total to the 2016 total. For this example, let's say that sales to existing customers increased by $3 million in 2017.
Sales to new customers in existing markets - Identify the customers who  bought from you in 2017 but did not buy from you in 2016. Then eliminate those customers who are based in the geographic market that you entered in 2017. The sales made to the remaining customers are sales to new customers in existing markets. Let's say this source accounted for $5 million of the 2017 revenue growth.
Sales to new customers in new markets - This is the total 2017 sales made to customers in the geographic market that you entered in 2017. Let's say this amount was $3 million.
The table below summarizes the results of this analysis and shows where growth in 2017 came from:














How Much Growth Can We Generate from Each Source in 2018?
Once you know where your current growth came from, you can use these insights to set more realistic and achievable growth objectives for the coming year. The key is to analyze why the current growth happened.
In our hypothetical company, for example, sales to new customers in existing markets produced $5 million, or 50%, of the total sales growth in 2017. One possible explanation for this growth is that the overall market for the company's products or services expanded in 2017. In other words, the growth may have resulted from being in "the right market at the right time." It's also possible that this growth occurred because the company took customers from competitors and increased its market share.
Either way, the important questions is:  How much future growth can the existing markets provide? If the existing markets still have substantial growth potential, the company will probably want to focus a significant amount of demand generation efforts on acquiring more new customers in these existing markets.

On the other hand, if those existing markets do not have significant future growth potential, the company will need a different strategy to drive growth. It may, for example, want to focus more demand generation efforts on acquiring new customers in the geographic market it first entered in 2017, or it may need to consider expanding into new geographic markets.
This type of analysis should be done for each source of revenue that contributed to current growth and for any new sources that are expected to contribute next year. Once this analysis is completed, you should set revenue targets for 2018 for each source of revenue that applies to your company. And once these revenue targets have been established, marketing leaders can begin to design marketing programs to achieve those objectives.

Top image courtesy of ccPixs.com via Flickr CC.

Sunday, October 1, 2017

New Research Shows the Evolution of B2B Content Marketing


Last week, the Content Marketing Institute and MarketingProfs published the first report relating to their latest annual content marketing survey. B2B Content Marketing:  2018 Benchmarks, Budgets, and Trends - North America is based on the responses of 870 survey participants who said their company primarily sells B2B products or services. These respondents represented a wide range of industries and company sizes, and most held marketing-related positions.

The CMI/MarketingProfs survey has been conducted annually for several years, and therefore it's possible to see how content marketing attitudes and practices have changed over time. The following table shows some of the major findings from the latest survey and the comparable findings from the 2017 edition of the survey.


























In general, these results indicate that content marketing is evolving in fairly predictable ways.

The Commitment to Content Marketing Remains Strong

Fifty-six percent of respondents in the 2018 survey said their company is extremely or very committed to content marketing. This was down from 63% in the 2017 survey, but I don't see this "drop" in commitment as particularly significant. As marketers gain experience with content marketing, their expectations become more realistic, and this can lead them to describe their commitment in a more "tempered" way.

Success with Content Marketing is Improving

In the 2018 survey, 24% of respondents described their company's overall approach to content marketing as extremely or very successful, up from 22% in the 2017 survey. In both surveys, a majority of respondents - 63% in 2018 and 62% in 2017 - said their content marketing efforts are now much more or somewhat more successful than they were a year earlier.

The Practice of Content Marketing is Maturing

In the 2018 edition of the survey, 34% of respondents rated the maturity of their content marketing efforts as sophisticated or mature. This was up from 28% in the 2017 survey. Many companies have been practicing content marketing now for several years, so it's not surprising that a growing number of marketers see their efforts as more mature.

The Continuing Need for Strategy

One of the disappointing findings in the 2018 survey is that only 37% of respondents reported having a documented content strategy. This percentage hasn't changed much for the past several years. It was 37% in 2017, 32% in 2016, and 35% in 2015. The CMI/MarketingProfs surveys have consistently shown that companies with a documented content strategy achieve greater content marketing success. In the 2018 survey, for example, 62% of the respondents who described their organization's content marketing efforts as extremely or very successful reported having a documented content strategy.

Top Image Source:  The Content Marketing Institute and MarketingProfs

Sunday, September 24, 2017

Research Says "Bullies" Dictate Most Buying Decisions


The conventional wisdom is that B2B buying decisions are made by buying groups that must reach a consensus. New research says the conventional wisdom may be wrong.

A recent study sponsored by DiscoverOrg and conducted by Steve W. Martin provides several interesting insights regarding the attitudes and behaviors of business buyers, and argues that B2B buying groups don't really operate the way we've come to believe.

Why Didn't They Buy? was based on an in-depth survey of over 230 business professionals who evaluate the products and services their companies use. Survey respondents represented a wide range of industries and business functions. Although this study was designed primarily with sales reps in mind, the findings will be valuable for B2B marketers. First, the noncontroversial stuff.

Risk

B2B marketing and sales professionals have long recognized that many business buyers are risk averse. They have a strong fear of taking risks, which means that the real unstated goal of the B2B buying process is to reduce fear by mitigating risks. Gord Hotchkiss captured the essence of this point several years ago when he wrote, "B2B buying decisions are usually driven by one emotion - fear. Specifically, B2B buying is all about minimizing fear by eliminating risk." (The BuyerSphere Project, 2009).

Mr. Martin's research confirms that most B2B buyers are risk averse, but it also shows that the degree of risk aversion varies across industries and business functions. To paraphrase George Orwell, all B2B buyers are risk averse, but some are more risk averse than others.

The study found that buyers in the fashion, media, and real estate industries have the highest tolerance for risk, while buyers in government, consulting, and healthcare are the most risk averse. In terms of business function, the study found that buyers in marketing and engineering have a higher tolerance for risk than buyers in accounting and IT.

Vendor Market Position

Being the recognized market leader provides significant advantages in most selling situations, but the DiscoverOrg study revealed that most business buyers aren't blindly committed to the market leader. When survey participants were asked about choosing an expensive product they would use every day, 62% of the respondents said they would pass on the most prestigious, best-known brand with the most functionality and the highest cost, and instead choose a fairly well-known brand with 85% of the functionality and 80% of the cost of the top-of-the-line product.

But, the importance of market leadership varies significantly across industries. The following table shows the percentage of buyers in nine industries who would buy the best-known, top-of-the-line product with the highest functionality and cost:






















The "Bully With the Juice"

Without a doubt, the most controversial finding in the DiscoverOrg study is that in most B2B buying groups, one member of the group largely controls the decision making process. Mr. Martin states this conclusion emphatically in the study report:  "Of the hundreds of sales cycles I have analyzed, I've found that one member of the selection team is able to exert his or her will and determine the vendor selected." Martin calls this person the "bully with the juice."

Over 90% of the survey respondents said there is always or usually one member of the buying group who tries to influence the decision his or her way. And 89% of the respondents said this person is successful in getting his or her way "most of the time."

These findings run counter to the widely-held view (supported by an impressive amount of research) that B2B buying decisions are primarily made by consensus. For a good discussion of the conventional view, take a look at "Making the Consensus Sale" by Karl Schmidt, Brent Adamson, and Anna Bird in the Harvard Business Review.

Frankly, it's difficult to reconcile Mr. Martin's findings with the more conventional view. In my work with B2B companies over the past 30 years, I've acted as a "facilitator" for dozens of project teams. I can say without reservation that it's not uncommon for a team member with a strong personality and strong opinions to dominate the team's work, even when that's not his or her intention. So I can see how a buying group could be "led" by a dominant personality.

On balance, however, my experience is that buying decisions are made by consensus, especially when the purchase under consideration impacts multiple business functions, and when the members of the buying group are of about the same rank in the corporate hierarchy.

Top image courtesy of Global Knowledge Partnership via Flickr CC.

"Bully" image courtesy of Pimkle via Flickr CC.

Sunday, September 17, 2017

Surveys Show the Growing Commitment to Sales Enablement


SiriusDecisions recently published the results of its 2017 Sales Enablement Study. The 2017 research was based on a survey of 250 B2B sales enablement professionals representing 45 industries. This study was somewhat skewed toward larger B2B enterprises, with 43% of the survey respondents coming from organizations  with more than $750 million in annual revenue

Sales Enablement is Widespread

Overall, 66% of survey respondents reported having a dedicated sales enablement function, up from 61% in the 2012 edition of the survey. But the use of sales enablement is significantly greater in larger enterprises. Eighty-three percent of respondents from organizations with revenue of $750 million or more said they have deployed or plan to deploy a dedicated sales enablement team.

It's interesting to compare the results of the SiriusDecisions research with a recent survey conducted by CSO Insights. In its 2016 Sales Enablement Optimization Study, CSO Insights found that 37.7% of companies have a dedicated sales enablement function. This lower percentage is likely due to the demographics of the CSO Insights study. Only about 27% of the respondents in the CSO Insights study were with organizations having more than $250 million in annual revenue.

Sales Enablement is Clearly a Sales-Led Function

Both the SiriusDecisions study and the CSO Insights study show that sales enablement is now firmly established as a sales-led function. In the SiriusDecisions survey, 40% of respondents said that sales enablement reports directly to sales leadership, 25% said it reports to the CEO, and 13% said it reports to sales operations. Only 10% of respondents indicated that sales enablement reports to marketing leadership.

In the CSO Insights study, 60.8% of survey respondents said their sales enablement function reports to executive sales management, and another 20.9% said that it reports to sales operations. Only 7.6% of the respondents said that sales enablement reports to marketing.

Commitment to Sales Enablement is Growing

The SiriusDecisions research also found that the commitment to sales enablement is large and growing. Twenty-eight percent of the survey respondents said they have seven or more full-time employees working in sales enablement, but this increases to 43% for high-performing companies. (Note:  The study defines high-performing organizations as those reporting that 80% or more of their full-time sales reps achieved quota in the most recent fiscal year.)

Even more significant, nearly three-fourths (74%) of the respondents said they plan to increase spending on sales enablement during the next 12 months.

No Major Surprises

The findings of these two studies are not particularly surprising. After all, improving sales effectiveness has been a top priority for company leaders for the past several years, according to the annual sales performance optimization studies by CSO Insights.

It's also not surprising that sales enablement is a sales-led function in most companies. View properly, sales enablement is a multi-faceted function that encompasses several types of activities and processes, including sales process improvement, sales training, sales technology, and sales content development and management. So, it seems appropriate to manage the sales enablement function withing the sales organization.

Image courtesy of Daniel Oines via Flickr CC.

Sunday, September 10, 2017

How to Make Your Content More Credible, and Why That Matters


Credibility is the single most important attribute of great marketing content. Effective content must also be relevant and valuable, but if potential buyers don't see your content as credible, they won't give you credit for relevance or value. Here are two ways to increase the credibility of your content.

Several recent research studies have contained both good news and bad news regarding B2B content marketing. First the good news. It's clear that content plays a vital role in B2B buying decisions.

Now for the not-so-good news. Numerous studies have painted a rather bleak picture regarding the level of engagement that content is producing. For example:
  • In a 2016 survey of business executives by The Economist Group, respondents reported that, on average, they engage with only about 25% of the thought leadership content they see every day.
  • A 2016 study by Beckon found that the amount of content published by brands had tripled in the previous year, but that customer engagement had remained flat. The study also found that just 5% of the total content produced garnered 90% of the total customer engagements, meaning that 19 out of 20 content pieces generated little or no engagements.
There are several possible explanations for this disappointing level of content engagement. One is that the tremendous growth in content volume makes lower rates of engagement inevitable. In The Economist Group study, 82% of surveyed executives reported that the volume of content available has made them more selective in what they consume.
Another possibility is that buyers simply don't see much value in much of the content they encounter. In the Edelman/LinkedIn study, respondents said they gained valuable insights from content only about 44% of the time.
Credible Content is Essential
It's also clear that lack of trust is undermining the impact of content. In a recent survey of technology buyers by TrustRadius, survey participants were asked to rate the helpfulness and trustworthiness of 12 sources of information used in buying decisions. Respondents ranked vendor or product websites and vendor collateral (ebooks, case studies, webinars, etc.) as the least helpful and trustworthy sources of information.
The reality is, most business buyers are conditioned to treat the information they receive from potential vendors with a healthy dose of skepticism. They recognize that prospective vendors have an agenda that is likely to cause most vendor-supplied information to be suspect. In essence, most business buyers presume that vendor content is biased and not altogether trustworthy. The challenge facing B2B marketers is to develop content that can overcome this presumption.
The single more critical attribute of effective content is credibility. Yes, great content will be relevant to the buyer's interests and needs, and it will provide the buyer with useful and valuable information. But if prospective buyers don't see your content as credible, they won't give you credit for relevance or value.
Credibility, like trust, cannot be manufactured, but there are some steps you can take to increase the credibility of your content. Here are two of the most important.

Make It Authoritative

Credible content is authoritative. Therefore, it's important not to fill your content with unsubstantiated claims or assertions. Marketing content doesn't need to read like an academic journal or a legal brief, but the main points you make should be supported by sound evidence, preferably from recognized and reputable sources.

Business buyers have repeatedly made their preference for authoritative content clear:

  • In its 2017 Content Preferences Survey, Demand Gen Report asked survey participants what recommendations they would make to improve the quality of the content provided by B2B vendors. Seventy-six percent of respondents said use more data and research to support content.
  • In a 2016 survey of senior business executives by Grist, survey participants were asked what qualities they find most valuable in thought leadership content. The third highest ranking attribute was content that is evidence-based and contains robust data. The survey also asked participants what turns them off about content. Forty percent of respondents said unsubstantiated opinions.
Make It (Mostly) Non-Promotional

Credible content is primarily non-promotional. This is a particularly important attribute for content that's designed for early-stage buyers, many of whom will quickly dismiss content that contains even a hint of self-serving promotion.

Once again, B2B buyers have made their preference for non-promotional content clear. In a 2017 survey of business buyers by the Content Marketing Institute and SmartBrief, survey participants were asked to identify the most desirable qualities of the content they use to make buying decisions. The third most important attribute identified by survey respondents was content that "is more educational than promotional in nature."

"Promotional content" normally refers to content that's about a company or its products or services, but the term "promotional" describes the tone of content as much as the content subject matter. Content can be highly promotional in tone even when it's not about a company or specific products or services. And, it's possible to develop company- or product-related content that's not overly promotional.

One key to keeping your content non-promotional is to avoid hyperbole. The dictionary definition of hyperbole is "an exaggerated statement or claim not meant to be taken literally." Example:  "There was enough food at the party to feed an army." Unfortunately, marketing content often contains claims or assertions that border on being hyperbolic, and most buyers will instinctively view such claims or assertions as lacking credibility.

In most cases, content will be more persuasive if it is less promotional. When I develop content resources for clients, I have a simple way to determine if a resource passes the promotional "smell test." I ask myself this question:  If an independent and respected journalist were writing an article about this topic, would the tone and content of the article be similar to my resource?

Keep It Real

B2B buyers have spoken, and they've made it clear that they want vendors to provide content that is credible, relevant, and insightful. Potential buyers will see your content as more credible if you make it authoritative and non-promotional.

Image courtesy of Ron Mader via Flickr CC.

Sunday, September 3, 2017

Get the Basics Right to Deliver Great Customer Experiences


Today's customers clearly expect great experiences. But most of their expectations are focused on a few critical interactions. What most customers really want is fast and responsive service that addresses their needs, solves their problems, or makes their lives easier.

A recent study by the CMO Council and SAP Hybris provides several important insights regarding the kinds of customer experiences that consumers are really looking for. This research consisted of a survey of more than 2,000 consumers in the United States, Europe, and Canada. Although this study focused on consumers, it's likely that many of the findings are applicable to business buyers.

The CMO Council research revealed that consumers' expectations are high, but it also found that consumers tend to be fairly utilitarian when it comes to customer experience. What they really want from companies is fast and responsive service.

When the study participants were asked to identify the attributes of an exceptional customer experience, the top three choices were:

  1. "Fast response times to my needs and issues" (52% of survey respondents)
  2. "Knowledgeable staff ready to assist wherever and whenever I need it" (47%)
  3. "Rewards for my loyalty and recognition of how long I have been a customer" (42%)
It's equally important to see what survey respondents put at the bottom of their list of important attributes:
  • "Always-on automated service" (8% of respondents)
  • "Brand-developed social communities to connect with other customers" (9%)
  • "Multiple touchpoints that add value to my experience" (10%)
  • "Recognizing my history with the brand at every touchpoint" (12%)
Survey respondents also identified their major customer experience frustrations:
  • 36% are angry about not being treated like the loyal customers they are
  • 33% said slow service or dealing with reps that know nothing about past history or purchases
  • 27% said not being able to reach someone who can actually help
The CMO Council also found that most consumers are willing to share some personal data with companies so long as they receive value in exchange. And consumers are clear about what constitutes value. They want something that saves them money (77% of respondents), saves them time (49%), or makes their life easier (47%). What they don't value is something that connects them with other customers (5%), makes them feel happy (9%), or "celebrates" them (13%).

Overall, the findings of this research indicate that significant opportunities exist to improve customer experience by focusing on a relatively small number of critical customer interactions. Those basic "moments that matter" have a disproportionate impact on how customers feel about their experience.

Image courtesy of Ricardo Mangual via Flickr CC.